Startup Chestnut Carbon has raised $160 million to plant, restore and manage trees on degraded farmland, generating carbon credits for customers that include Microsoft Corp.

The company’s goal: Providing high-quality, nature-based credits that sidestep issues that have plagued carbon markets.

The Series B round, led by the Canada Pension Plan Investment Board and Cloverlay Investment Management LLC, comes less than a month after Chestnut signed an agreement with Microsoft to provide 7 million tons of carbon removal credits. That’s the second-largest carbon removal agreement the tech giant has struck. With a number of tech companies struggling to meet their climate targets due to a surge in energy-intensive data centers, carbon removal has taken on added importance.

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